TIDMVEIL
RNS Number : 8790S
Vietnam Enterprise Investments Ltd
14 March 2023
14 March 2023
Vietnam Enterprise Investments Limited
("VEIL" or "the Company")
Monthly Update
VEIL is a London listed investment company investing primarily
in listed equities in Vietnam and is a FTSE 250 constituent. The
Company's NAV performance for February 2023 is set out in this
notice.
Company Performance
-- As of 28 February, VEIL's NAV decreased 10.8% over the
previous month against a fall of 9.0% for its reference index, the
Vietnam Index ("VNI"), both in US dollar terms.
-- The Company's NAV per share was US$7.76 as of 28 February and its total NAV was US$1.6bn.
-- VEIL's three month's NAV per share performance in US dollar
terms is +1.4%, -37.2% over one year and +22.4% over three years.
Over the same time periods, the performance of the VNI was +1.7%,
-33.0% and +18.8%, respectively.
-- The share price fell 13.4% in February and has declined 4.0%
year-to-date, both in US dollar terms.
-- In GBP terms, the Company's NAV per share was GBP6.41 as of
28 February (-9.3% for the month and -1.8% year-to-date) and its
total NAV was GBP1.3bn. The share price was down 11.9% for the
month and 4.6% year-to-date.
-- The share price discount to NAV as of 28 February was 13.3%,
compared with 10.8% at the end of January 2023.
-- The Company repurchased 170,000 shares in February, to be
held in treasury, these were the first repurchases in 2023.
Dien Vu, VEIL's Portfolio Manager commented:
"Following two months of double-digit returns the Vietnam Index
fell 9.0% in February. This was mainly due to unease over recent
missed payments in the corporate bond market and renewed concerns
of a higher terminal Federal Reserve rate.
"The State Bank of Vietnam has granted the first tranche of
credit quotas to banks for 2023, with an average allocation of
9.0%, down from 11.0% at this stage in 2022. This announcement is
not expected to significantly affect lending activities or the
banking system's liquidity. As a result of improving fungibility
and weaker borrowing demand, the lending rate has dropped a
moderate 0.4% year-to-date, and deposit rates for six months and
longer reduced between 0.5% to 1.5%.
"Interest rates may remain at their current levels over the
coming months due to pressure on the State Bank of Vietnam to
maintain or even raise rates in line with other major central
banks, and the prospect of more persistent inflation. The CPI for
the first two months of the year increased 4.6% year-on-year and we
believe this could be managed on average around 4.2%-5.0% in
2023.
"The service sector is looking resilient as Vietnam welcomed a
total of 1.8 million visitors in January and February, and retail
sales grew 13.0% year-on-year. The 2023 target of ten million
international arrivals looks achievable and bodes well for foreign
receipts and tourism-related businesses. Standalone macroeconomic
numbers for February are impacted by seasonal holiday effects, but
combined with January we can see that year-to-date industrial
production fell by 6.3% against the same stage last year and total
trade decreased by 12.6% to $96.1bn. These may not be stellar
numbers, but on a brighter note the trade balance remained solid
with a surplus of US$2.8bn, and the Purchasing Managers Index rose
to 51.2, its first positive month after three months of contraction
and its highest rate of expansion since August 2022.
"In the portfolio, investor concern over the bond market was
pronounced, having a knock-on effect to two of VEIL's real estate
holdings. Vinhomes ("VHM) and Khang Dien Housing ("KDH") were both
unfortunate bystanders of sector-wide underperformance, losing over
10% in February as foreign investors turned to risk-off mode.
Mobile World Group ("MWG") was also a laggard due to management
giving weak 2023 guidance in its latest call, announcing 2023
revenue expectations of between US$5.7bn to US$6.4bn (an increase
of 1-12% year-on-year) and net profit of US$178m to US$200m (growth
of 2-15% year-on-year), anticipating a slow start to the year and
an improvement over H2 2023."
Economic Overview
-- Exports and imports in the first two months of the year
declined 10.4% and 16.0% year-on-year to US$49.4bn and US$46.6bn,
respectively, leading to a trade surplus of US$2.8bn. Exports to
China grew 4.2% year-on-year whilst other key markets fell,
including the US (-21.0%), EU (-4.2%), and ASEAN (-7.9%).
-- Disbursed FDI fell 4.9% year-on-year to US$2.6bn in the first
two months of 2023, while registrations dropped 38.0% to just
US$3.1bn, mainly due to a lack of large-scale expansions of
existing projects.
-- The Index for Industrial Production fell 6.3% year-on-year
for January and February combined, with manufacturing falling
6.9%.
-- The Purchasing Managers Index rose to 51.2, showing that new
orders increased for the first time in four months and indicating
that production might start to pick up in the coming months.
-- February's CPI rose 0.5% month-on-month and 4.3% year-on-year
and can be attributed to rising petrol and gas cylinder prices
which is in-line with the global trend.
-- The Vietnamese dong ("VND") depreciated 1.2% against the US
dollar in February, and 0.5% year-to-date. The VND appreciated 1.2%
against the pound sterling in January and has depreciated 0.1%
year-to-date.
Top Ten Holdings (66.8% of NAV)
Company Sector VNI % NAV % Monthly Return One-year
% Return %
Asia Commercial
1 Bank Banks 2.0 13.5 -7.7 -13.7
================== =================== ===== ===== ============== =========
Vietnam Prosperity
2 Bank Banks 2.8 12.4 -13.6 -35.4
================== =================== ===== ===== ============== =========
3 Hoa Phat Group Materials/Resources 2.8 7.0 -10.8 -46.3
================== =================== ===== ===== ============== =========
4 Vietcombank Banks 10.8 6.9 0.3 6.1
================== =================== ===== ===== ============== =========
5 Mobile World Group Retail 1.4 6.2 -15.2 -43.2
================== =================== ===== ===== ============== =========
6 FPT Corporation Software/Services 2.2 5.0 -5.0 1.4
================== =================== ===== ===== ============== =========
7 Becamex IDC Property 2.1 4.6 -2.7 2.5
================== =================== ===== ===== ============== =========
8 PetroVietnam Gas Energy 4.8 4.5 -4.0 -13.5
================== =================== ===== ===== ============== =========
9 Vinhomes Property 4.4 3.5 -19.6 -47.2
================== =================== ===== ===== ============== =========
10 Khang Dien Housing Property 0.4 3.1 -10.4 -49.2
================== =================== ===== ===== ============== =========
Vietnam, Index - - - -9.0 -33.0
================== =================== ===== ===== ============== =========
Source: Bloomberg, Dragon Capital
NB: All returns are given in USD terms
For further information, please contact:
Vietnam Enterprise Investments Limited
Rachel Hill
Phone: +44 122 561 8150
Mobile: +44 797 121 4852
rachelhill@dragoncapital.com
Jefferies International Limited
Stuart Klein
Phone: +44 207 029 8703
stuart.klein@jefferies.com
Buchanan
Charles Ryland / Henry Wilson / George Beale
Phone: +44 20 7466 5111
veil@buchanan.uk.com
LEI: 213800SYT3T4AGEVW864
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